Start the Habit of 'Specific Savings' by Putting Aside Money for Car Maintenance

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The words "save now" appear on a car ignition button
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When you’re first getting started, saving money for multiple different things at the same time can seem overwhelming. That’s why I recommend that you start with only one or two categories. For most people, car maintenance is an obvious and necessary place to start. A specific savings account for car maintenance is a big step toward financial security.

Saving for specific, non-monthly expenses is one of the important steps in a functional overall financial plan. Sometimes called sinking funds or reserve funds, specific savings are money that you have set aside for a specific purpose. Sometimes, these funds are for one-time events, like a wedding or a trip, but they often are used for expected but irregular expenses like car maintenance or pet care.

Why Specific Savings?

Having specific savings for expected but irregular expenses is essential when those expenses happen. Let’s say your car needs new tires, and they cost $800. Without the specific savings, you’re stuck either finding the money in your monthly budget or taking on debt. Neither of those options is great, and those options sometimes aren’t even available to you.

But if you’ve been putting away a little bit of money each month into a car maintenance account, then maybe you have enough to cover the new tires. Or if you don’t have enough saved yet, you at least won’t have to find or borrow the whole amount.

Where Do I Save This Money?

You can sock away specific savings in various ways. I’m pretty sure that I’ve tried most of them, and each way has pros and cons. Some people like to withdraw cash each month and keep it in their house. This is subject to the risk of damage, loss or theft, plus some people will just grab $20 when they need it.

Another way is to have one savings account and keep track of different balances within that account, using a spreadsheet or notebook. This worked well for me for many years. I was very aware of spending when I did our family’s books this way. However, it is time consuming and can get tedious.

Some banks will let you set up “sub-accounts” within your savings account, which is the same thing as doing it on paper, but it is through the bank’s interface.

Lastly, some banks and credit unions will let you have many savings accounts. That’s the method I’m using right now. We have around 10 different accounts, for car maintenance and replacement, travel, charitable giving, health care expenses, etc. I have automatic transfers set up for the first of each month, and the money is there when we need it.

How Much Should I Save?

This is a tricky question because every situation is different. Your car may be older or newer, or it may be more or less expensive to maintain. You may drive a lot or only a little.

One common rule of thumb is to save $50 per month, per vehicle, toward vehicle maintenance. That may sound like a lot, but it really isn’t. Depending on your vehicle, one set of tires could wipe out an entire year’s worth of $50 per month.

You will need more if you have an expensive car or drive a lot. You might get by with less if you drive very little, but even cars that don’t get driven much need maintenance from time to time.

But I Don’t Have $50 a Month to Save!

If you’re scrambling to make it from paycheck to paycheck, even $50 a month may feel like too much to save. But here’s the thing: If you need $800 in new tires, that money is coming out of your budget one way or another. Either you’ve saved ahead, or you’re eating beans this month, or you’re making payments into the future.

Having that money saved before you need it preserves your quality of life when the expense happens, and it avoids debt and interest payments.

If you can’t start with $50 a month, start with less. But think ahead to how you can reach that goal. Maybe you designate a portion of your next raise to your car maintenance fund, or you pick up a side hustle that earns $50 a month.

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